Latin America's Pacific Gateway

The Diplomat speaks with Chile’s ambassador to the United States about his country’s plans in the Asia-Pacific.

By Eddie Walsh for The Diplomat

November 30, 2011

The Diplomat is running a series of interviewswith Washington DC-based ambassadors on defense, diplomacy, and trade in the Asia-Pacific region. In the fourth in the series, conducted by Washington correspondent Eddie Walsh, Ambassador ArturoFermandoisof the Republic of Chile discusses his country’s substantial political, economic, and social engagement with its Asia-Pacific neighbors.

What are Chile’s core national interests, and how are they advanced through increased engagement in Asia-Pacific?

Chile’s foreign policy in the Asia-Pacific focuses on promoting economic interests and commercial ties with other countries, strengthening regional integration and multilateralism, and supporting peace and international security.

Since the 1980s, Chile has fostered an active policy of engagement and political dialogue with the countries of the Asia-Pacific region, which was reflected in its decision to develop new diplomatic ties with relevant countries such as Indonesia, Malaysia and Singapore. This initiative was also illustrated by its gradual joining with the mechanisms of regional engagement in Asia-Pacific, such as the Pacific Basin Economic Council and the Pacific Economic Cooperation Council. This led to Chile’s membership in APEC in 1994, followed by the creation of the Foundation of the Pacific (Fundación del Pacífico) in Chile. This stage was complemented by the passing of a vast number of trade agreements with the region’s leading economies, such as Japan, South Korea, China, Australia, Malaysia, and recently Vietnam.

Chile has also been actively involved in initiatives such as the Forum for East Asia-Latin America Cooperation, as well as in the main efforts to advance trade liberalization in the region, actively participating from the beginning in the negotiation process of the Trans-Pacific Partnership. The origin of the TPP dates back to the P-4 initiative with its founding members: Singapore, New Zealand, Brunei, and Chile.

Chile is often described as the Pacific gateway to Latin America, and as such can claim to be a stakeholder in the “Asia-Pacific Century.” Beyond Easter Island, what does Chile see as its role and responsibilities in the South Pacific?

Chile pioneered the effort of creating stronger ties with Asia. It was the first South American country to join APEC, which meant acknowledgement from member countries of Chile’s political interests, as well as of Chile´s status as a reliable partner with political and macroeconomic stability. Through the network developed by its various trade agreements, Chile has sought to engage Asia with South America.

As a result of this process, the Asia-Pacific region is of great importance for Chile in terms of trade: 60 percent of Chilean exports are sent to APEC economies, while 51 percent of Chilean imports derive from that region. Even though China plays a crucial role in this partnership, Southeast Asia is also of great relevance and dynamism. In addition to trade, this relationship has created new opportunities of bilateral cooperation in other areas, such as renewable energy, as demonstrated in the case of the Philippines of geothermal energy, or of infrastructure with Singapore.

In multilateral terms, our country decisively supported the establishment of the Pelindaba Treaty, declaring the region free of nuclear weapons. With Singapore and other countries sharing a similar vision, we formed the 3G (Global Governance Group) in the United Nations. In other words, our engagement with the Asia-Pacific region goes beyond the possibility of bilateral cooperation and business, and is an opportunity to promote common positions on the international agenda.

Does Chile intend to establish itself as a middle power in Asia-Pacific? If so, does it need to soon increase the percentage of GDP allocated to defense spending and undergo a significant military modernization?

Our military, which places greater emphasis on quality than quantity, has been strictly deterrent in nature, and provides fundamental support for the country to overcome natural disasters. During the recent earthquake in February 2010, the contribution of the armed forces was vital in the recovery process, assistance to the community and reestablishment of infrastructure of our country, which is highly vulnerable to natural disasters. On the other hand, the Chilean military makes a significant contribution to UN peacekeeping operations, as demonstrated in the case of Haiti and of Bosnia-Herzegovina, in which we were the only South American country. We have also participated in the mission involving East Timor and Cambodia and the Indian-Pakistani border. The modernization of our military equipment is connected to the renovation of obsolete equipment, and is strictly limited to the role of defending our sovereignty and territorial integrity.

What is Chile’s strategic assessment of rising Asian powers, particularly China and India? Is Chile concerned about peace and stability in the region as a result of revisionist action by these countries?

One of Chile’s foreign policy priorities has been to promote peace and international security. In this regard, China and India have had great relevance at the regional level and have become important global powers, as also seen in the case of Brazil. The development experienced by China and India at the regional and global levels deserves our attention, especially from the perspective of growth and economic opportunities. However, we should also highlight their central role in other areas of great impact on international agenda, such as sustainable development, international security, and environment. The Western Hemisphere should give special attention to this new reality and seek new forms of cooperation and understanding with these new global powers, for the benefit of international economic and political stability. Simultaneously, as surging powers in a relatively unstable region, China and India will have to play important roles in avoiding conflict within their sphere of natural influence, which will require their joint effort and further understanding through existing and new mechanisms of dialogue.

China has made significant investments in satellite diplomacy through China Great Wall Industry Cooperation. Latin American countries, including Bolivia and Venezuela, have been the beneficiaries. There are concerns that such cooperation could boost their military capabilities (ex. ISR). Based on these arguments, are you concerned that China’s satellite diplomacy in Latin America is undermining your national security interests?

For Chile, existing cooperation between China and Bolivia or Venezuela in technology aims to develop expertise for peaceful purposes. Chile follows the principle of nonintervention in the internal affairs of other sovereign states, and respects other governments’ interest in developing their own international scientific cooperation networks.

Do you expect to remain unchallenged in Latin America or do you foresee other countries, particularly Argentina, Peru, Bolivia, and Brazil, emerging as major Asia-Pacific players in the years ahead?

Chile doesn’t pursue hegemony in its relationship with Asia-Pacific. We don’t see other countries’ interests as a challenge. On the contrary, we strongly supported Peru when it joined APEC, and now we encourage Columbia´s joining to the organization. We regard the participation of other Latin American countries as opportunities for further political and economic cooperation with Asia-Pacific, which will bring an overall positive effect on the region. We have also been promoting a closer joint effort between the Arco of the Pacific and ASEAN to create a permanent mechanism of dialogue and interaction, and we are also seeking the building of a highway infrastructure connecting the Atlantic with the Pacific Ocean, benefiting those South American countries without direct access to the Pacific. With Brazil and Bolivia, we are in the process of finishing, within a year, a bioceanic central corridor, which will merge the Santos Port with the Pacific Coast though Chilean northern ports.

Aside from the United States and Argentina, what other Western hemisphere countries has Chile engaged with on Asia-Pacific affairs? Would it be in Chile’s national security interests to promote increased engagement by countries such as Colombia, Mexico, and Argentina in Asia-Pacific affairs?

As previously indicated, developing a stronger relationship and promoting joint efforts with other countries of the region with the purpose of gaining access and competing in the best way possible with Asia-Pacific countries is part of Chile´s foreign policy. For better integration with Asian countries and successfully competing in those markets, joints efforts with Latin American countries are part of the Chilean strategy. A concrete example of this engagement is the empowerment of the Arco of the Pacific initiative, in which Peru, Colombia, Mexico and Chile are working together. The purpose of this agreement is to create a single market to better compete in the region. It includes sectors such as energy, infrastructure, commerce, free movement of people and a duty system.

Bolivia has reactivated its claim on the Atacama corridor and asserts sovereign rights to Pacific Ocean access. How does this affect Chilean national security strategy? Do you fear that lingering tensions between Chile and Bolivia could lead to conflict?

Chile and Bolivia don’t have pending issues on borders, which were clearly defined by the 1904 Peace and Friendship Treaty, currently in force with full binding effect. However, Chile has always been willing to facilitate Bolivia´s access to the Pacific Ocean, which goes far beyond the tools provided by international conventions to landlocked countries. This commitment, naturally, implies full respect of international treaties and the existing borders.

Despite warming relations in the middle part of the last decade, Chile and Peru recently found themselves at odds over Chilean military exercises and an alleged case of international espionage. What is your take on the status of bilateral relations with Peru? Can potential disagreements be managed within the existing security architecture in Latin America or Asia-Pacific?

Bilateral relations between Chile and Peru are in good standing. Former President Alan García made a successful visit to Chile in 2010, and the elected President Humala visited President Piñera in 2011, immediately after the election. Bilateral trade has increased, and Chilean investments in Peru are flowing unprecedentedly.

We also have a disagreement: Peru sued Chile before the International Court of Justice in The Hague, and asked for a revision of the maritime delimitation between our two countries. Those maritime borders were set by several treaties and agreements during the 20th century. Then, because Chile’s main guiding principle in foreign policy and international affairs is respect for international law, we are particularly strong in backing respect for treaties and the peaceful resolution of conflicts.

We believe that there are no possible disagreements that couldn’t be resolved through bilateral dialogue and international law. Therefore, Chile doesn’t believe that this pending lawsuit should interfere with the mindset of other issues that shape our bilateral relationship.

Chile has been a vocal advocate of increased cooperation on non-traditional security issues, particularly transnational crime and natural disasters. How does Chile’s engagement as an Asia-Pacific country advance its interests with respect to non-traditional security issues?

Yes, my country believes that cooperation must include those topics, and I would add democracy. Chile has valuable expertise on disaster preparedness, mainly earthquakes, and we are willing to share our expertise for improvement. These issues have been raised in a bilateral way, with agreements with some countries, as well as in a multilateral stage through the conditions developed under APEC. On promoting democratic values, Chile is also a founding member of the multilateral organization called the Community of the Democracies, which includes other regional countries supporting this entity. Chile has also pushed this side of cooperation with ASEAN´s member countries and promoted activities within the framework of Forum for East Asia-Latin America Cooperation.

Chile is said to have more bilateral trade agreements than any other country, including agreements with the U.S., China, and India. How important is trade with these three countries to Chile’s economic power? What is the relative importance of trade with each of these countries, and how is that relative importance changing?

When we talk about trade, Chile is one of the freest countries in the world. There are 22 free trade agreements with 58 countries that support for statement. Our vast network of agreements has been a key component to Chile´s development. Exports and foreign investment with our main economic partners has been important not only for growth, but also for job creation and innovation.

China and the U.S. are critical trade partners for Chile. In the first half of 2011, China remained our main trade partner, representing 19.6 percent of our international trade, followed closely by the European Union (18.7 percent) and the United States (17.3 percent). As for imports, the United States continues to be our main supplier of foreign goods and services. India is also an interesting example of a successful trade relationship.

Even though our exports to India represent a 2.5 percent of our trade, it grew remarkably by 49 percent this year. 2011 has been a year of recovery for our bilateral trade and some markets, such as the U.S., have regained lost ground growing at 42 percent. As our trade agreements consolidate over time, we see that the overall relationship with these partners also strengthens.

How does Chile see the Trans-Pacific Partnership trade negotiations as contributing to its Pacific engagement? How would it describe the progress of the negotiations, and the likelihood of their completion in 2012?

The Trans-Pacific Partnership is indeed an outstanding opportunity to deepen our presence in the Asia-Pacific region and streamline the rules that govern our trade relations. Despite the fact that Chile has already in place free trade agreements with almost every TPP country, having a single agreement will simplify the rules and provide regulatory coherence, among other benefits. The TPP process continues to gain interest in the region and current engagement will most certainly expand to more countries in the future. The negotiations have been quite intensive and fast paced, producing significant results during this year. Yet, new efforts are needed to complete this process, and we celebrate President Barack Obama´s support, shown recently during the APEC Meeting in Honolulu. We anticipate a vigorous process in 2012, but at this time it’s difficult to predict when negotiations will conclude.

It has been widely reported that Chile is considering making major investments in its energy sector, including promotion of a civilian nuclear energy program. Cyber proliferation poses a threat to such energy assets (ex. Stuxnet), including critical infrastructure. How is Chile responding to this threat, and is cyber security one issue that is driving Chile to stronger military-military and law enforcement-law enforcement cooperation with the United States?

Chile´s private sector is actively engaged in expanding our energy capacity to satisfy the demand generated by our economic growth. By 2020, Chile will need to add 8,000 megawatts to our grid of which 3,000 are already in construction. There are no projects in the near future for a nuclear power facility in Chile and our energy planning focuses more on renewable sources of energy and promotion of energy efficiency.

As for the threats that all energy grids face, Chile is actively strengthening its response capability to a wide variety of external factors, especially considering the effects that natural disasters can pose on the supply of electricity and fuel. Our military and law enforcement cooperation with the United States is comprehensive and up to date with current defense challenges. Chile and the United States have a successful track record of cooperation in defense and emerging challenges such as the one you mention will continue to be addressed through our established channels.

Does Chile need to reshape its national identity to place greater emphasis on its role as an Asia-Pacific power to take full advantage of the Asia-Pacific century? If so, what is being done to accomplish this objective?

More than reshaping it, Chile is enriching its national identity through adding a deeper international component to it. Integration is a word that the country now truly understands. Simultaneous processes of integration took place towards the Asia-Pacific, Europe and Latin America itself. This isn’t an isolated phenomenon. The United States is also a target of integration: economic integration a decade ago, and now integration through free movement of people, knowledge, science and technology, education and entrepreneurship.

Therefore, since several years ago, Chile has defined its strategy of development as one based on openness and “open regionalism”. It’s true, however, that Chile is placing a greater emphasis on the Asia-Pacific region. That is because of its political and economic dynamism, as well as of its development as the main destination of our exports. Nonetheless, this new panorama didn’t lead to a change of identity, but instead toward more openness and acceptance of cultures and traditions that had been regarded as distant for a few decades.

Chile doesn’t appear to be active in the promotion of its culture abroad. As Chile looks to the Pacific in the next century, will it prioritize soft power tools, such as public diplomacy, more than it has in the past?

The country is now making an additional effort to promote its culture abroad. We certainly have pending tasks on this effort. It isn’t easy for the people in Asian countries to identify with elements of the Chilean culture beyond the scope of the well-known, high quality products exported by the country. Chilean exports to the region consist mainly of copper and raw materials, in addition to agro-industrial products, fruits, salmon, wine, wood, through which we have enjoyed some success of promotion of Chile abroad.

The challenge is delivering a broader cultural identity. Our Nobel laureates in literature, Pablo Neruda and Gabriela Mistral, are remarkable partners here. Their work has received recognition in several Asian countries, including China, Japan and Vietnam. Painting and music, together with the art of our native people, including the Rapa Nui people of Easter Island, are a relevant part of this new message of a broader cultural identity.

With the successful rescue of our Atacama miners in 2010, however, the entire world had the gracious opportunity of knowing more about the values of Chilean culture. Those workers, trapped for 70 days 2,000 feet deep underneath the mine provided visibility to the values that made the miracle possible: personal courage, technical accuracy, professionalism, political leadership, faith, transparency and friendship from the world. The story created more interest toward the Chilean people and culture in a worldwide scale, including Asia.